Polish forwards have reduced the scale of expected rate cuts over the next 3–6 months to under 25 bps, down from more than 25 bps at the start of February. This shift followed the February National Bank of Poland (NBP) rate meeting.
Members of the Monetary Policy Council, including Ludwik Kotecki, Gabriela Maslowska, Przemyslaw Litwiniuk and Henryk Wnorowski, have pointed to a high probability of a 25 bps cut at the upcoming meeting. They referred to an improved inflation outlook.
Policy Path After March
Debate has increased over the path of policy after March, with fewer references to a 3.25% terminal rate. Some members have suggested only one 25 bps cut, implying a 3.75% terminal rate.
Governor Glapinski previously indicated a 3.50% terminal rate, while other members have discussed more cautious outcomes. Commerzbank expects the terminal rate to be below 3.50%.
On that view, the zloty may lag its CE3 peers for some months. The article notes it was produced using an AI tool and reviewed by an editor.
Forward markets are currently pricing in less than a 25 basis point cut from the National Bank of Poland, even as multiple MPC members signal a high chance of a cut in March. This disconnect between market pricing and central bank rhetoric suggests an opportunity is forming. We see the dovish commentary as a strong indicator that a rate reduction is imminent.
Implications For Zloty Positioning
The argument for a rate cut is strengthened by recent data showing January 2026 inflation falling to 3.1%, a significant drop from the 3.9% seen in the final quarter of 2025. Coupled with softer Q4 2025 GDP growth of just 2.2%, the NBP has a clear mandate to begin easing policy to support the economy. These figures make the central bank’s dovish stance appear more credible than current market pricing implies.
Given this outlook, we believe the Polish zloty is positioned for a period of underperformance. The market appears to be underestimating the NBP’s willingness to cut rates not just in March, but potentially further towards a terminal rate below 3.50%. This creates a favorable environment for strategies that anticipate a weaker zloty.
For derivative traders, this points towards positioning for PLN weakness relative to its CE3 peers, whose central banks are expected to pursue a slower easing path. We see potential in establishing long positions in currency pairs like the Czech koruna against the zloty (CZK/PLN). Options strategies that profit from a rising EUR/PLN, such as buying call spreads, also appear attractive over the next several weeks.
This potential policy pivot is significant when we consider the NBP’s actions last year. Throughout most of 2025, the bank held its reference rate firm at 4.00%, waiting for definitive proof that inflationary pressures were subsiding. The upcoming March meeting is therefore not just a single decision, but likely the start of a new easing cycle that has not been fully priced by the market.
